PULIC

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A Absolute Liability Liability regardless of fault. Adjudication The act of determining an issue or settling a dispute in court. Admitted Assets See Assets . Allocated Loss Adjustment Expense (ALAE) Expenses directly attributable to specific claims. Include payments for defense attorneys, medical evaluation of patients, expert medical reviews and witnesses, investigation, and record copying. Annual Aggregate Limit For claims-made carriers, the annual aggregate limit is the maximum amount the carrier will pay for all claims arising from incidents that occurred and were reported during a given policy year. For occurrence carriers, the annual aggregate limit refers to the maximum amount the carrier will pay for all claims arising from incidents that occurred during a given year of insurance. Assessability An obligation of policyholders to pay additional money, in excess of premium amounts, to cover past company losses for which reserves have proven to be inadequate. Arbitration An alternative method for resolving disputes that allows the parties to define the process. For additional information, read about The Doctors Company’s arbitration program in California . Assets The property and financial resources owned by an insurance company. Admitted assets are those that can be liquidated to raise cash to pay claims. Nonadmitted assets are assets, such as real estate (other than home office), furniture, and other equipment that are not recognized for solvency purposes by state insurance laws or insurance department regulations. Assumed Premium The consideration or payment an insurance company receives for providing reinsurance for another company. Attorney-in-fact The entity that manages an interinsurance or reciprocal exchange and to whom each subscriber (policyholder or owner) gives authority to exchange insurance among subscribers. back to glossary index B Best’s Rating A rating given to insurance companies by the A.M. Best Company, an insurance industry ratings agency. The ratings range from A++ (Superior) to D (below minimum standards). Ratings of E and F are given to companies under state supervision or in liquidation. The ratings reflect A.M. Best’s evaluation of an insurance company’s financial strength and operating performance relative to the norms of the property and casualty insurance industry. back to glossary index C Captive In its simplest form, a captive is a wholly owned insurance company that is formed by a noninsurance entity or group to insure or reinsure some or all of the risks of its parent. A captive is usually administered by specialized consultants. (See “ A Physician’s Guide to Captives .”) Claim A written notice, demand, lawsuit, arbitration proceeding, or screening panel in which a demand is made for money or a bill reduction, and which alleges injury, disability, sickness, disease, or death of a patient arising from the physician’s rendering or failing to render professional services. Claims-made Insurance Claims-made is a form of insurance in which coverage is limited to liability for those claims that arise from incidents or events that occur and are reported to the insurance company while the policy is in force.

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